The table given below shows the total fixed and variable costs of a firm.Table 8.3

-In Table 8.3, the average fixed cost of the first unit of output is ____ while the average fixed cost of producing 8 units of output is ____.
A)$30; $40
B)$40; $5
C)$40; $40
D)$40; $280
E)$40; $320

Question

The table given below shows the total fixed and variable costs of a firm.Table 8.3
 
-In Table 8.3, the average fixed cost of the first unit of output is ____ while the average fixed cost of producing 8 units of output is ____.
A)$30; $40 
B)$40; $5 
C)$40; $40 
D)$40; $280 
E)$40; $320

Quizplus · Accepted Answer

The average fixed cost is calculated by dividing the total fixed cost by the units produced. 
For the first unit of output, the total fixed cost is $40 and the units produced is 1. Therefore, the average fixed cost of the first unit of output is $40/1 = $40. 
For producing 8 units of output, the total fixed cost is still $40 (because fixed cost does not change with the level of output) and the units produced is 8. Therefore, the average fixed cost of producing 8 units of output is $40/8 = $5.

The Table Given Below Shows the Total Fixed and Variable